The story takes place in Huanli (the Year of Dazzling) 3015. Donatia and Kouran, two countries fighting for supremacy, are causing the world to be torn apart due to the constant war. Amidst the strife is the island country Nil Kamui, which has lost its independence. Red Dragon, the guardian god of Nil Kamui, goes out of control. Will the island country be able to regain its independence?

Chaos Dragon is based on the role-playing fiction project Red Dragon, a story which was created by five notable character designers: Gen Urobochi (Fate/Zero), Kinoko Nasu (Kara no Kyoukai), Iduki Kougyoku (Mimizuku to Yoru no Ou), Ryohgo Narita (Durarara!!), and Simadoriru (member of the Stripe Pattern doujin circle). The results of their tabletop role-playing game sessions over six days created material for a seven-volume light novel series.